MNI INTERVIEW: China CPI’s Pork Support To Turn Negative In H2
China’s pork prices, a core component of the country’s Consumer Price Index, are expected to turn negative year-on-year in this week's June’s CPI print, falling for the first time this year after rising 6.5% y/y between January-May, eroding one of the already-subdued inflation gauge’s few supports, with food prices falling 1.4% y/y in May, a government advisor told MNI.
Although pork prices are expected to rise slightly from H1, they could fall by 10–20% y/y in the second half, said Zhu Zengyong, chief analyst at the Ministry of Agriculture and Rural Affairs' Pork Industry Monitoring and Early Warning Center, attributing the decline to high base effects, with last year’s notable H2 price rise unlikely to repeat in 2025. (See MNI INTERVIEW: China Pork Prices To Weigh On CPI In 2025)
Overall market conditions were expected to remain stable through H2 from the first half, with increased piglet births over the past year keeping hog supply ample, but offset by a decrease in slaughter weight, Zhu said.
Zhu, also a researcher at the state-affiliated Chinese Academy of Agricultural Sciences, said there was unlikely to be a repeat of the price surge in the third quarter of last year, when wholesale prices rose to an average of CNY24.4 per kg in H2 2024, from CNY20.6 in H1, as supply tightened due to a reduction in breeding sows and a winter decline in piglet availability.
“The fertile sow herd reached 40.42 million in May, a year-on-year increase of 1.2%,” Zhu noted.
“Consumer demand will rebound seasonally in the second half, especially around October’s Mid-Autumn Festival and National Day ,” Zhu added, “but overall, the reasonable profitability of pig breeding will ensure an abundance of pork supply and minimise price volatility.”
In the third week of June, the price of live pigs was CNY14.6 per kg, down 11.8% from the beginning of the year and 20.8% year-on-year, according to data from the Pig Network.
China's June CPI will be released on Wednesday July 9.
